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Chapter 21 Section 3
Main Idea: The IR inspired new ideas about economics and affected society in many ways.
New Ideas about Economics -Old way: Govt’s restricted trade to protect their own industries -New idea: Gov’t should not interfere in business -“Laissez-faire economics” -Adam Smith -Wrote “The Wealth of Nations” (1776) -Markets free from gov’t benefited everyone -“Market economy” -Free competition -Father of “capitalism” -Thomas Malthus -Concerned about population growth -Population always exceeds food production -Always going to be poor, hungry people -Owners used his beliefs as an excuse for low wages -Business owners became wealthy -Political influence -Entrepreneurs -Someone who starts a business -Financiers, bankers, investors -Andrew Carnegie -“Rags to riches” -Worked in steel mill; eventually steel tycoon -Cornelius Vanderbilt (Railroads) -John D. Rockefeller (Oil)
Competing Economic Views -Not everyone agreed with capitalism -Robert Owen -Thought for the good of everyone, society/gov’t should own the property and control industry -Socialism -Tested his beliefs out in New Lanark, Scotland -Good working conditions, good housing, free education -Was a model -Also tested his ideas out in New Harmony, Indiana -Wanted to create a “utopia” -Social democracy -Karl Marx -Had more radical view of socialism -As capitalism grew, there would be more poverty -Poor would rebel -Capitalism would fail -Workers would establish new system based on cooperation and equal distribution of wealth -Wrote “Das Capital” -Evils of capitalism -Thought rich would not go along with thisàno benefit to them -Workers had to control the gov’t -Gov’t controls the economyà“Command economy” -Developed communism -Gov’t controls all factors of production and controls the economy
Effects on Society -Started a separation between men and women -Men went to factory to work; women stayed at home -Poor familiesàeveryone went to work -England, France, Germany became economic powers -Greater ability to make weapons/ships as well -Could control economy around the world (colonies) -United States becoming world power (around 1900s) -Overall, societies became more wealthy -Standard of living improved -Middle class had “leisure” time |